Good news

This isn’t the good news, because I don’t for one minute believe the feds will go after these guys:

Shahien Nasiripour scoops that HUD’s inspector general audited Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial and referred its finding to the Department of Justice for possible prosecution. A welcome shift for HUD, which is usually the demonized and not the demonizer. “The audits accuse the five major lenders of violating the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government. The audits were completed between February and March, the sources said. The internal watchdog office at HUD referred its findings to the Department of Justice, which must now decide whether to file charges…The resulting reports read like veritable indictments of major lenders, the sources said. State officials are now wielding the documents as negotiating props in their ongoing talks with mortgage companies aimed at forcing them to agree to pay fines to resolve allegations of routine violations in their handling of foreclosures.”

Nope, here’s the good news!

Eric T. Schneiderman, the New York attorney general, has requested information and documents in recent weeks from three major Wall Street banks about their mortgage securities operations during the credit boom, indicating the existence of a new investigation into practices that contributed to billions in mortgage losses.

Officials in Mr. Schneiderman’s office have also requested meetings with representatives from Bank of America, Goldman Sachs and Morgan Stanley, according to people briefed on the matter who were not authorized to speak publicly. The inquiry appears to be quite broad, with the attorney general’s requests for information covering many aspects of the banks’ loan pooling operations. They bundled thousands of home loans into securities that were then sold to investors such as pension funds, mutual funds and insurance companies.

It is unclear which parts of the byzantine securitization process Mr. Schneiderman is focusing on. His spokesman said the attorney general would not comment on the investigation, which is in its early stages.

This means for all practical purposes, that cozy little state attorney generals’ coverup the administration wants so desperately is coming undone. Hallelujah, sometimes ambition and the best interests of the people coincide!

More here.

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